Carlsberg looking to set up sixth brewery in India
After making significant investments into five Greenfield breweries in the last four years, Danish brewer Carlsberg is looking for a site to set up one more brewery in India. The company currently operates five manufacturing units in the country. It has breweries in the states of Himachal Pradesh, Maharashtra, Rajasthan, West Bengal and Andhra Pradesh. Its Medak (a place 70 km away from Hyderabad city in Southern India) brewery, which has one million hectoliter capacity, also supplies to Kerala and Karnataka. Medak brewery was set up in Dec 2010 with a capacity of half a million hectoliters. It has recently doubled the capacity to one million hectoliters at this brewery.
According to Soren Lauridsen, Managing Director of Carlsberg India, “The Company is set to reach full capacity utilisation during the summer months. Therefore, we are looking at setting up another plant in India. However, we are yet to finalise the location.” Laurisden further adds “In India, States have their own way of dealing with sale of beer. For instance, we cannot sell beer in Tamil Nadu unless we have a local manufacturing facility. Therefore, we are in the process of evaluating sites for a new plant. Typically, a new plant requires about USD 35-40 million. It varies depending on local land cost”.
Market share
Carlsberg has become the third largest beer seller in the country, accounting for about 6.1 per cent market share in year 2011 (rising from 4.3 % in 2010). The company is aiming to reach double digits share in India in the next couple of years.
Carlsberg entered India in May 2006 by incorporating South Asia Breweries Pvt. Ltd. Since then, it has made a slow but steady climb on the Indian market, moving past domestic brewers like Mohan Meakin and Mount Shivalik, although it is still a distant third after the market leaders UB and SABMiller. But, numbers notwithstanding, Carlsberg is making inroads into the urban markets of India in an aggressive manner.
The company has already surpassed the overall number two brewer SABMiller in the important market of the national capital Delhi in July 2011. Carlsberg, which sells the strong and lager variants of Tuborg and Carlsberg beers, has been ahead of SABMiller with 16-17 percent market share, while SABMiller’s market share average is estimated at 14-15 percent in India’s capital.
Stiff sales target and marketing blitzkrieg
Carlsberg Group is optimistic about India’s future as a beer market. Group CEO Jørgen Buhl Rasmussen had stated a couple of years back that India will be one of the biggest beer markets in the long term.
The company has set up a stiff target of 40 percent growth in sales volume in the current financial year. The company is leaving no stone unturned to increase its market share in this small but rapidly growing beer market. It has recently introduced new lables for its iconic Tuborg beer: When consuming beer directly from the bottle at a particular angel (62.5 degrees), the Tuborg title gets displayed perfectly. According to Carlsberg India, Tuborg is the fastest growing brand in the Indian beer market, and has witnessed a significant volume growth of 60 per cent.
Besides, sponsoring the “Man of the Match” award at the ongoing and hugely popular Indian Premier League of Cricket the company also brought the UEFA EURO 2012 Trophy on a three city tour to India in February. Carlsberg is one of the sponsors of the Euro cup to be held in Poland and Ukraine from 8 June - 1 July.
